Please review the property tax examption for state of Texas to see if your orginazation qualify for the exemption.
http://www.window.state.tx.us/taxinfo/proptax/tc06/ch11b2.htm#11.18
Generally, my concept of a fraternity house is as a social organization established primarily for the benefit of its members. In most cases the Fraternity's primary purposes do not encompass any of the charitable functions described in Title I, Chapter 11, Sec. 11.18(d) of the Texas Property Tax code.
To be entitled to an exemption from property tax pursuant to the above code you organization must qualify under Internal Revenue Code (IRC) Sec. 501(c)(3). If your organization is a standard college fraternity organized primarily as a social organization for its members who occasionaly do charity work, then it will not qualify as a 501(c)(3) organization. Instead you will likely qualify as a non-profit social club or fraternal society under IRC Sec. 501(c)(7) or (8).
Accordingly, unless you can establish that the Fraternity's primary purpose is charitable in nature (meeting one of the criteria in Sec. 11.18(d)) and you qualify for exemption under IRC 501(c)(3), you will not qualify for the property tax exemption.
Because it is impossible for me to identify and consider ALL the relevant facts, this advice is not intended or written to be used for the purpose of avoiding penalties, and cannot be used for that purpose.
As I indicated above, if you qualify to be a 501(c)(3) organization for Federal tax purposes and if the reason for your qualification is that your organization performs one of the functions listed in Sec. 11.18(d) of the Texas Property Tax code, then yes you will qualify for the property tax exemption.
What you need to tell me is whether your fraternity has as its primary purpose, one of the activities listed in Sec. 11.18(d)(http://www.window.state.tx.us/taxinfo/proptax/tc06/ch11b2.htm#11.18)? If your fraternity has as its primary organizations objective one of the items listed, then you will qualify for both the 501(c)(3) and the property tax exemption.
Sec. 11.18(d)(20)(B) says, "membership in the organization is open to all students enrolled in the institution and is not limited to those chosen by current members of the organization". Based on the assertion that membership is limited to those chosen by current members, you will not qualify under this provision.
Most standard college fraternities will not qualify as 501(c)(3) organizations because they generally do not embody the typical charitable, religious, scientific, literary or educational (i.e. providing education) objectives. Rather, fraternities are more analogous to social organizations which typically qualify under 501(c)(7) like your alumni corporation. Co-operative housing is typically housing provided to low-income individuals at below market rates. What the IRS and state are looking for is an organization thats dedicated to providing housing to individuals who could not otherwise afford it.
Certified Public Accountant (CPA)
CPA, CFP, PFS, Tax Practitioner 21 Years, Member AICPA/CSCPA Tax/Financial Planning Committee Member